A durable financial power of attorney (POA) is a document that grants authority to someone of your choosing to handle your financial matters. This can include paying your bills, accessing your bank accounts and even selling or buying assets and negotiating real estate deals.
A regular Durable POA allows the named agent to step in at any time and doesn't require a disability to be active. For example, your wife could sign a financial document for you while you are out town.
A "springing" Durable Power of Attorney on the other hand, only gives your financial agent access to your finances when a doctor has diagnosed you as mentally or physically unable to handle your own affairs. In the case of a "springing" durable POA, you will be in full control of your own financial matters while you are of sound mind and body.
If your family depends upon you for financial security, a POA can allow them to continue using your assets if you should become disabled. If you do not name a power of attorney your spouse or family will have to get a court order to handle your finances. This will require a judge to declare you "incompetent" and could delay paying bills and paying for any medical care you may need.
Your Durable Financial POA is only valid while you are still alive. Upon your death, control of your financial assets will pass to your estate executor or your trustee if you have named one.
In addition, a Durable Financial POA will also terminate automatically if you cancel it, a court deems it invalid, your spouse was the agent and you divorce, or if the named agent is not available. Considering this last case, it is a good idea to name a back-up financial agent.
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